Troutman Pepper Locke attorneys Alexandra Steinberg Barrage, Matthew Bornfreund, and James Stevens, along with Michele Alt of Klaros Group and other leading banking and financial services professionals, released an open letter to the incoming administration outlining concrete ways the FDIC, OCC, and Federal Reserve Board (Agencies) could encourage new and innovative bank formation.

The open letter notes that new bank formation in the United States is at an all-time low and that potential organizers are deterred by the Agencies’ complex, outdated, and burdensome bank charter application process. Creating a faster, clearer path for applicants seeking bank charters would foster innovative financial services through the approval and supervision of new banks, bring more activity within the regulatory perimeter, and enhance competition.

With significant policy shifts underway at the federal level, including FDIC Acting Chairman Travis Hill’s recent support for new bank formation, we’re optimistic about the prospects for meaningful change. By providing greater objectivity and transparency in the application process, the changes outlined in the open letter are designed to ensure fair treatment and enhance government efficiency, without sacrificing safety and soundness. None of the changes proposed require congressional action; all could be enacted quickly.

The executive summary and full letter can be found here.